Japan records trade surplus as export growth balances out weak China demand

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TOKYO (AP) — Japan recorded a trade surplus of 57.3 billion yen ($360 million) in February, according to government data released Wednesday, reversing from a deficit a month earlier.

Exports grew at a better-than-expected 4.2% in February to 9.57 trillion yen, the Finance Ministry’s seasonally adjusted preliminary data show.

Imports grew 10.2% on-year to 9.51 trillion yen following a 2.5% contraction in January.

Japan posted a 1.15 trillion trade deficit that month.

Import costs are likely to rise as the effective closure of the Strait of Hormuz due to the war against Iran drives up oil and other energy prices.

Japan imports almost all its oil, and Brent crude — the international standard — has jumped in recent weeks to about $100 a barrel.

Geopolitical uncertainty, especially the war in Iran, loom large for Japan's export-reliant economy, but a weak yen is likely to work as a plus. The U.S. dollar has been trading at about 159 yen, when it was below 150 yen a year ago.

Shipments to China declined 10.9% from the same month a year ago, although demand was likely unusually weak due to this year's Lunar New Year holidays falling in February.

Those to the U.S. dropped 8%, as auto exports fell. President Donald Trump’s tariffs on Japanese autos, now at 15%, continue to weigh on Japan’s automakers and auto supply manufacturers.

Exports to Europe held up, growing 17% in February from the same month a year ago. Exports to the rest of Asia also grew, by 2.8%.

Investors are eyeing what the Bank of Japan might do on interest rates as the central bank’s policy board concludes its two-day meeting Thursday.

“Central banks are waiting to see if these elevated oil prices are a temporary blip or a running theme for 2026, in which case we may see more global peers pivot from a dovish to a hawkish stance,” said Tim Waterer, chief market analyst at KCM Trade.

Investors are also closely watching what deals, if any, could come from the summit later this week between Trump and Sanae Takaichi, Japan's first woman prime minister.

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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama